# In the matter of A.L. Sudarshan Constructions Company Limited CP (IB) No. 324-7-HDB-2020

> NCLT judgment dated 2022-05-06. Citation: TCN-2022-NCLT-02844. The case involves a Company Application filed by Canara Bank (formerly Syndicate Bank), the…

- **Court:** NCLT
- **Order date:** 6 May 2022
- **Citation:** TCN-2022-NCLT-02844
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/al-sudarshan-constructions-company-limited-cp-ib-no-324-7-hdb-2020-967fe266

## Summary

### Background

The case involves a Company Application filed by Canara Bank (formerly Syndicate Bank), the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process (CIRP) against M/s. A.L. Sudershan Constructions Company Limited, the Corporate Debtor. The Corporate Debtor had availed loan facilities from the Financial Creditor since 1990, which were renewed periodically. The Corporate Debtor defaulted on repayments, leading to the account being classified as a non-performing asset (NPA) on 2006-06-11. The Financial Creditor recalled the facilities after repeated requests and demands went unanswered. The Corporate Debtor acknowledged the debt multiple times and proposed One-Time Settlement (OTS) which were

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## Facts

Syndicate Bank (now Canara Bank) extended loan facilities to A.L. Sudershan Constructions Company Limited since 1990. These facilities were periodically renewed. On 2005-05-24, the Corporate Debtor approached the Financial Creditor for renewal of facilities, including a short-term loan facility of Rs. 400 Lakhs, a SODH Loan Facility of Rs. 595 Lakhs, and a Bank Guarantee of Rs. 4000 Lakhs. The loans were secured against hypothecation of Plant and Machinery, Raw Materials, Work-in-Progress, finished goods, book debts, and other current assets, as well as an equitable mortgage of UREM properties and personal guarantees. The Corporate Debtor defaulted on repayments, leading to the account being classified as NPA on 2006-06-11. The Financial Creditor recalled the

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IB Code, 2016, can be rejected by the Adjudicating …

**Ratio:** It is a settled position of law that an application under Section 7 of the IB Code, 2016,

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**Reasoning:** The Adjudicating Authority must look into the amount of the undisputed claim to find out

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**Interpretation:** The law clarifies that the existence of a dispute regarding the exact amount

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**Application:** Even if the amount as alleged against the sale of the assets is considered as

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## Parties

- **Judges:** Bhaskara Pantula…; BINOD KUMAR…
- **Appellants:** Syndicate…
- **Respondents:** A.L. Sudarshan…; A.L. Sudarshan…

## Timeline

- **1990-01-01 — Loan Facilitie…**: Corporate Debtor availed loan facilities…
- **2005-05-24 — Renewal of Fa…**: Corporate Debtor approached the Financial…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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